CAMS Exam Practice Questions &
answers rated A+
How do drug traffickers and other criminals use the fine art industry to disguise illicit proceeds?
A. They use forged or fraudulent invoicing of priceless works of art by auction houses B. They
commingle legitimate and illicit proceeds by principals for payment of fine art C. They
immediately resell priceless works of art after purchase from a foreign auction house D. They
use anonymous agents to buy the art and have the payment wired from offshore havens - ANS
✔✔D
An anti-money laundering specialist at a large institution is responsible for informing senior
management about the status of the anti-money laundering program across the organization.
Which report is the most useful?
A. The total credit exposure for non-cooperative countries and territories B. Results of related
audits and examinations C. Details on inquiries received from law enforcement D. Notification of
management changes in the different major divisions - ANS ✔✔B
What is most valuable when using the internet as an investigative source?
A. A team of AML investigators B. A reference list of websites known to yield credible
information C. A combination of independent thinking and technical skills D. A powerful search
engine - ANS ✔✔B
What should senior management do in order to promote a culture of anti-money laundering
compliance?
A. They should include compliance with AML procedures as condition of employment B. They
should attend all training sessions with front-line employment C. They should have close ties
with the independent auditors of the AML program D. They should base employee
compensation on the amount of suspicious activity they detect - ANS ✔✔A
,What is the result of an increased awareness of the potential for gatekeepers to assist in money
laundering in recent years?
A. The IMF has raised the profile of gatekeepers, requiring that countries regulate them B.
Lawyers who represent money launderers can more easily be prosecuted C. Accountants are no
longer considered gatekeepers, since they are not permitted to set up companies or trusts D.
The FATF recommendations cover lawyers performing financial transactions - ANS ✔✔B
Which three are principles found in the document "Principles of information Exchange between
Financial Intelligence Units (FIUs)"?
A. The exchange of information between FIUs should take place as informally and as rapidly as
possible and with no prerequisites, while guaranteeing protection of privacy and confidentiality
of the shared data B. Differences in the definition of offenses that fall under the competence of
FIUs should be before free exchange of information takes place C. The Egmont principle of free
exchange of information at the FIU level should be possible on the basis of reciprocity, including
spontaneous exchange D. It should be possible for communication between FIUs to take place
directly and without intermediaries - ANS ✔✔A,C,D
What are three risk factors a financial institution should examine with regard to a proposed new
product? A. The complexity of the product B. The need to verify the identification of the
customer C. Whether the product is easily transferable D. Whether other financial institutions
are marketing the product - ANS ✔✔A,B,C
In some instances, a financial institution may receive a warrant from law enforcement
authorities to search its premises. A search warrant is a grant of permission from a court for a
law enforcement agency to search certain designated premises and seize specific categories of
items or information. Generally, what is the required threshold for the requesting agency to
establish in order to obtain a search warrant of a financial institution?
A. Reasonable belief B. Probable cause C. A preponderance of the evidence D. Clear and
Convincing proof - ANS ✔✔A
Which three characteristics make non-profit organizations vulnerable to misuse for terrorist
financing? A. Enjoying the public trust B. Having access to a considerable sources of funds C.
,Being listed as government nonprofit organization D. Having a global presence for national and
international operations and financial transactions - ANS ✔✔A, B, D
An anti-money laundering specialist at a financial institution has received a legal request to
provide all transaction records for a specific individual since 2004. Which three items should be
delivered?
A. Monthly statements and transaction activities for that individual since 2004 B. All wire
transfer for that individual since 2004 C. All security trading activities for that individual since
2004 D. Signature cards from accounts opened by that individual since 2004 - ANS ✔✔A,B,C
How do payable through accounts (PTAs) differ from normal foreign correspondent accounts? A.
The customers do not have to worry about sanctions list screening such as OFAC B. The
customers have the ability to directly control funds at the correspondent bank C. The customers
can contact the correspondent bank directly to send wire transfers D. The customers can hide
their identity through the use of cover payments in U.S. dollars - ANS ✔✔A
What is the term for trading through multiple accounts, where an individual generates offsetting
profits and losses and transfers of positions through accounts that do not appear to be
commonly controlled?
A. Ponzi scheme B. Market Manipulation C. Net Trading D. Wash Trading - ANS ✔✔D
The Wolfsberg Principles for Private Banking list circumstances that would require additional
due diligence, including activities that involve which three of these choices? A. Foreign
jurisdictions B. High Risk Countries, including those identified by credible sources as having
inadequate Anti-Money Laundering standards C. High Risk activities, involving clients and
beneficial owners whose source of wealth originates from activities known to be vulnerable to
money laundering D. Public officials, including those individuals who have or had positions of
public trust - ANS ✔✔B,C,D
Which three are examples of best practices terms of ensuring an adequate AML program? A.
Engage an independent party to perform a periodic review of the program B. Review applicable
domestic and international AML guidance C. Perform a risk analysis on a regular basis and
, compare it to the coverage of the AML program D. Review the accuracy of account opening
applications - ANS ✔✔B,C,D
Which three statements are true regarding the extraterritorial reach of laws and legislation of
the U.S.? A. The criminal anti-money laundering law can apply to transactions that occur
partially overseas B. Economic and trade sanctions by OFAC may pose extraterritorial risks for
financial institutions and businesses outside the U.S. C. The extraterritorial reach covers all
transactions throughout the global economy D. The defendant does not need to know the funds
came from an illegal activity under state, federal or foreign law - ANS ✔✔A,B,D
What is a criterion for FATF membership? A. The country should be democracy B. The country
should be a member of a FATF-style regional body C. The country should have already
implemented all of the FATF Recommendations D. The country should have already
implemented the standards of the European Union Directives - ANS ✔✔B
According to the Second European Union Money Laundering Directive, what may knowledge of
criminal conduct be inferred from? A. Subjective, factual circumstances B. Objective, factual
circumstances C. Objective, non-factual circumstances D. Subjective, non-factual circumstances
- ANS ✔✔B
In which type of banking transaction is price manipulation, as a form of money laundering, a
common practice?
A. Redeeming an annuity B. Sending a wire transfer C. Issuing a letter of credit D. Subscribing to
a cash management account - ANS ✔✔C
Which two aspects of the security broker dealer industry increase its exposure to money
laundering? Choose 2 answers A. The routine use of wire transfers from, to or through multiple
jurisdictions B. They easy conversion of holdings to cash with significant loss of principal C.
Disposing of cash through securities purchases D. Fast paced transactions conducted
electronically - ANS ✔✔C,D
answers rated A+
How do drug traffickers and other criminals use the fine art industry to disguise illicit proceeds?
A. They use forged or fraudulent invoicing of priceless works of art by auction houses B. They
commingle legitimate and illicit proceeds by principals for payment of fine art C. They
immediately resell priceless works of art after purchase from a foreign auction house D. They
use anonymous agents to buy the art and have the payment wired from offshore havens - ANS
✔✔D
An anti-money laundering specialist at a large institution is responsible for informing senior
management about the status of the anti-money laundering program across the organization.
Which report is the most useful?
A. The total credit exposure for non-cooperative countries and territories B. Results of related
audits and examinations C. Details on inquiries received from law enforcement D. Notification of
management changes in the different major divisions - ANS ✔✔B
What is most valuable when using the internet as an investigative source?
A. A team of AML investigators B. A reference list of websites known to yield credible
information C. A combination of independent thinking and technical skills D. A powerful search
engine - ANS ✔✔B
What should senior management do in order to promote a culture of anti-money laundering
compliance?
A. They should include compliance with AML procedures as condition of employment B. They
should attend all training sessions with front-line employment C. They should have close ties
with the independent auditors of the AML program D. They should base employee
compensation on the amount of suspicious activity they detect - ANS ✔✔A
,What is the result of an increased awareness of the potential for gatekeepers to assist in money
laundering in recent years?
A. The IMF has raised the profile of gatekeepers, requiring that countries regulate them B.
Lawyers who represent money launderers can more easily be prosecuted C. Accountants are no
longer considered gatekeepers, since they are not permitted to set up companies or trusts D.
The FATF recommendations cover lawyers performing financial transactions - ANS ✔✔B
Which three are principles found in the document "Principles of information Exchange between
Financial Intelligence Units (FIUs)"?
A. The exchange of information between FIUs should take place as informally and as rapidly as
possible and with no prerequisites, while guaranteeing protection of privacy and confidentiality
of the shared data B. Differences in the definition of offenses that fall under the competence of
FIUs should be before free exchange of information takes place C. The Egmont principle of free
exchange of information at the FIU level should be possible on the basis of reciprocity, including
spontaneous exchange D. It should be possible for communication between FIUs to take place
directly and without intermediaries - ANS ✔✔A,C,D
What are three risk factors a financial institution should examine with regard to a proposed new
product? A. The complexity of the product B. The need to verify the identification of the
customer C. Whether the product is easily transferable D. Whether other financial institutions
are marketing the product - ANS ✔✔A,B,C
In some instances, a financial institution may receive a warrant from law enforcement
authorities to search its premises. A search warrant is a grant of permission from a court for a
law enforcement agency to search certain designated premises and seize specific categories of
items or information. Generally, what is the required threshold for the requesting agency to
establish in order to obtain a search warrant of a financial institution?
A. Reasonable belief B. Probable cause C. A preponderance of the evidence D. Clear and
Convincing proof - ANS ✔✔A
Which three characteristics make non-profit organizations vulnerable to misuse for terrorist
financing? A. Enjoying the public trust B. Having access to a considerable sources of funds C.
,Being listed as government nonprofit organization D. Having a global presence for national and
international operations and financial transactions - ANS ✔✔A, B, D
An anti-money laundering specialist at a financial institution has received a legal request to
provide all transaction records for a specific individual since 2004. Which three items should be
delivered?
A. Monthly statements and transaction activities for that individual since 2004 B. All wire
transfer for that individual since 2004 C. All security trading activities for that individual since
2004 D. Signature cards from accounts opened by that individual since 2004 - ANS ✔✔A,B,C
How do payable through accounts (PTAs) differ from normal foreign correspondent accounts? A.
The customers do not have to worry about sanctions list screening such as OFAC B. The
customers have the ability to directly control funds at the correspondent bank C. The customers
can contact the correspondent bank directly to send wire transfers D. The customers can hide
their identity through the use of cover payments in U.S. dollars - ANS ✔✔A
What is the term for trading through multiple accounts, where an individual generates offsetting
profits and losses and transfers of positions through accounts that do not appear to be
commonly controlled?
A. Ponzi scheme B. Market Manipulation C. Net Trading D. Wash Trading - ANS ✔✔D
The Wolfsberg Principles for Private Banking list circumstances that would require additional
due diligence, including activities that involve which three of these choices? A. Foreign
jurisdictions B. High Risk Countries, including those identified by credible sources as having
inadequate Anti-Money Laundering standards C. High Risk activities, involving clients and
beneficial owners whose source of wealth originates from activities known to be vulnerable to
money laundering D. Public officials, including those individuals who have or had positions of
public trust - ANS ✔✔B,C,D
Which three are examples of best practices terms of ensuring an adequate AML program? A.
Engage an independent party to perform a periodic review of the program B. Review applicable
domestic and international AML guidance C. Perform a risk analysis on a regular basis and
, compare it to the coverage of the AML program D. Review the accuracy of account opening
applications - ANS ✔✔B,C,D
Which three statements are true regarding the extraterritorial reach of laws and legislation of
the U.S.? A. The criminal anti-money laundering law can apply to transactions that occur
partially overseas B. Economic and trade sanctions by OFAC may pose extraterritorial risks for
financial institutions and businesses outside the U.S. C. The extraterritorial reach covers all
transactions throughout the global economy D. The defendant does not need to know the funds
came from an illegal activity under state, federal or foreign law - ANS ✔✔A,B,D
What is a criterion for FATF membership? A. The country should be democracy B. The country
should be a member of a FATF-style regional body C. The country should have already
implemented all of the FATF Recommendations D. The country should have already
implemented the standards of the European Union Directives - ANS ✔✔B
According to the Second European Union Money Laundering Directive, what may knowledge of
criminal conduct be inferred from? A. Subjective, factual circumstances B. Objective, factual
circumstances C. Objective, non-factual circumstances D. Subjective, non-factual circumstances
- ANS ✔✔B
In which type of banking transaction is price manipulation, as a form of money laundering, a
common practice?
A. Redeeming an annuity B. Sending a wire transfer C. Issuing a letter of credit D. Subscribing to
a cash management account - ANS ✔✔C
Which two aspects of the security broker dealer industry increase its exposure to money
laundering? Choose 2 answers A. The routine use of wire transfers from, to or through multiple
jurisdictions B. They easy conversion of holdings to cash with significant loss of principal C.
Disposing of cash through securities purchases D. Fast paced transactions conducted
electronically - ANS ✔✔C,D
